Birmingham Prison – Another Nail in the Coffin of Public Services Outsourcing?

The story of Birmingham prison is incredible, and not in a good way. Prisoners basically have been running the place, with drugs openly taken and sold. Some inmates are so terrified of others they won’t come out of their cells.

The Inspector of Prisons on an unannounced visit found the place was filthy, with some officers having a snooze and locking themselves in their offices. While the inspectors were there, someone got into the “secure” staff car park and wrecked nine cars! It sounds like an episode of what we would have seen as a totally unrealistic shock-horror B-Movie – “When the Prisoners Take Over The Prisons” or something.

So G4S, the firm that has management responsibility, has been relieved of that role for six months and the government (Ministry of Justice - MoJ) is taking control back to try and sort out the issues. That’s another blow to the concept of outsourcing critical services to private sector firms, who are supposed to be able to do things more efficiently. And another few votes for Labour at the next election.

But how could matters have been allowed to get to this point? For instance, why didn’t G4S put more staff in to resolve the problems?

Much of this must come back to the way the contract is structured. Rory Stewart, the Minister responsible, when asked why the government had not acted sooner, claimed commercial negotiations with G4S as one of the reasons for the delay in taking the emergency measures. That doesn't sound good, and it seems that either the contractual terms and conditions don’t incentivise the right behaviour, or something has gone horribly wrong with the contract management regime, or both.

It certainly looks like the contract is not fit for purpose. One can only assume that somehow it was “better” for G4S to allow this dreadful state of affairs to continue, indeed to get worse, rather than spend the money needed to put things right. Clearly it isn’t easy to run prisons like Birmingham, with the increased use of drugs like Spice affecting all prisons, but if you put enough staff in there, repair the broken infrastructure, improve inmate education, then it must be possible to drive improvement.

We accept that moves such as reducing the number of prisoners could not be undertaken by G4S, that had to come from the government side. But other steps – the cleaning, the infrastructure, training of officers and indeed sheer resourcing levels – surely G4S could have done much of what is now being proposed?

So the implications for G4S, the penalties for failure, must be less than the costs of putting things right - otherwise why didn’t the firm increase the number of staff? That suggests G4S took a commercial decision to allow the situation to get to this point and if that is the case, then the contract is not fit for purpose. But we are also told G4S will bear the cost of these new measures – so does that blow our hypothesis out of the water?

We asked G4S why they hadn’t invested more and not surprisingly, they wouldn’t tell us. They did respond very quickly, which was impressive.

“… you'll appreciate that it really wouldn't be appropriate for us to speak in any detail to you about HMP Birmingham, including contractual arrangements. These are discussions that will take place between ourselves and the Ministry. I’m not sure this will be particularly helpful to you, but our statement in relation to today's news is below. We can't comment any further than that at this time”.

“HMP Birmingham is an inner-city remand prison which faces exceptional challenges including increasingly high levels of prisoner violence towards staff and fellow prisoners. The well-being and safety of prisoners and prison staff is our key priority and we welcome the six month step-in and the opportunity to work with the Ministry of Justice to urgently address the issues faced at the prison.”

We don’t have much sympathy for the firm but there is obviously more to this than meets the eye. G4S won’t say more because they don’t want to queer their pitch for future business, and the MoJ won’t open up because they are undoubtedly culpable as well, although as a Department that has seen a 40% cut in its budget, some sympathy there is also required.

So the socialist view will be simply that this shows the private sector shouldn’t run public services, and the capitalist view will be that the public sector has screwed up with incompetent procurement and contract management … and we are no nearer the truth. Anyway, it is not exactly a glorious success for private sector service provision or for MoJ procurement and contract management.

Perhaps the National Audit Office will give us the true story in a year or two. Actually, that's another organisation that deserves sympathy; they published this excellent guidance, but must wonder whether anyone (other than us) actually bothers reading it.